The Air Show picks up the bill and as an organisation they are both insured against total loss and sit on nest eggs sufficiently large to cope.
The worst scenario outside of a flying or indeed other accident, is that aircraft have pre positioned and all is in place before cancellation. This means that the positioning elements of display fees have to be paid, fuel issues completed and HotAc paid for. In other words almost all the overheads of the event without any of the expected income due to refunding. Any event has its business model and Risk Assesment which is why it is an all year round job not a month before and can-do.